The tourism-dependent Gulf Islands lost a cumulative total of 2.7 million visitor trips over the decade after a newly privatized BC Ferries corporation began steadily reducing service and raising passenger fares.

Another 559,000 visitor trips vanished from the Central and North Coast routes after 2004, for a total of more than 3.2 million.

The controversial austerity program that Gulf Islanders say is hurting regional businesses — the percentage of self-employed entrepreneurs there is about three time the provincial average — is defended by both ferry authorities and the provincial government as an essential measure to offset rising operating costs.

But annual financial reports to the ferry commissioner show smaller service routes cited as money drains often operate in the black. The Swartz Bay-Gulf Islands service, for example, generated net surpluses of $2 million in both 2013 and 2012. The red ink rises when servicing costs for ferry company debt that has zoomed from zero to $1.4 billion in just 10 years are applied.

And even as the corporation was starting to trim more than 5,000 sailings to and from small communities with no alternative, it was simultaneously pouring cash into a hole in the water called Route 30, a daily ferry service between Tsawwassen and Nanaimo.

Route 30, one of the three major routes to Vancouver Island cited as the ferry system’s money-spinners, has, in fact, consistently operated at annual losses that dwarf other losing routes over the period when cuts were decimating the visitor traffic that sustains the region’s economically vital tourism sector.

The cumulative losses from this one route, almost $180 million in total, are more than 10 times the $14 million in annual savings that the ferry corporation seeks to recover by slashing operating costs on its so-called minor routes.

Since residents are compelled to travel for work, shopping, school, and medical treatment and are therefore forced to accommodate reduced service and increased tariffs, it seems reasonable to conclude that the decline in visitor trips represents discretionary travel, most of which involves tourism or recreation.

Tourist-reliant businesses on the Gulf Islands — resorts, restaurants, bed and breakfasts, small retailers and outdoor recreation providers — warn that the economic consequences are harming a region that’s often featured as a marquee destination in provincial marketing.

“We feel like we are being boiled like a frog with the rising fees and the pending service cuts,” says Tim O’Connor, who runs a coffee shop on Saltspring Island. He says that when he had to grapple with end-of-life care for two relatives, one in Duncan and one in Victoria, it required four trips per week on the ferries.

“It nearly — or may have — bankrupted me,” O’Connor said of his plight. “That, compounded by our dropping revenues from tourism and decreased disposable income of our year-round residents, has really affected (us).”

Tom Toynbee, who returned to Saltspring to take over Mouat’s, a company his grandmother began there in 1907, points an accusing finger at the provincial government. He argues it privatized the ferry system not to improve an essential service but as an expedient way to get the costs off its books.

“What has amazed me,” says Toynbee, “is how compliantly most people in the media bought into the government story. The ferry system was regularly described as ‘massively subsidized’ when, in fact, it is the least subsidized of all the major car-carrying ferry systems in the world.”

One ploy, he says, was the characterization of Gulf Islanders as entitled, well-heeled fat cats, a fiction that’s quickly dispelled by census data that shows median income sharply lagging the rest of the province and an “idyllic paradise” that’s largely without the amenities urbanites take for granted — supermarkets, sewers, doctors and dentists, policing and fire services.

How important is all this to the rest of the province?

In 2011, tourism contributed more than $1.3 billion in tax revenue, $3.2 billion in export revenue and $6.5 billion in added value to the provincial economy. And since 17 per cent of the tourism businesses contributing to this provincial economic activity are located in the Vancouver Island/Coast economic zone, the impact of a significant downturn in tourism there promises to affect everyone else, too.

This effect is amplified because the coastal region serviced by BC Ferries contributes roughly 36 per cent of provincial tax revenues yet benefits from only six per cent of provincial capital expenditures on transportation infrastructure, including ferry spending, according to an economic analysis by former MLA and cabinet minister Gordon Wilson. The affected region includes 51 municipalities and regional districts including all of Vancouver Island, the Gulf Islands, the Sunshine Coast and Powell River, the Discovery Islands, Alert Bay and Sointula, the central coast, Prince Rupert and the north coast and Haida Gwaii. This comprises 20 per cent of B.C.’s population. So fewer tax dollars from a stagnant or contracting economy across a region providing more than a third of provincial tax revenue can only mean less money for spending somewhere else.

So what’s the plan?

Well, it appears there is no plan. A policy paper delivered to the provincial government in 2011 noted that while there’s much talk about marketing the provinces’ tourist attractions — like the Gulf Islands — there’s no planning that actually “ties together the main policy areas for tourism into an action-oriented business plan.”

Gosh, I’m no economist, but I’d say a greater public “investment” in ferry services aimed at recovering those vanishing tourist trips might be one strategy for stimulating business activity and generating some concurrent increase in provincial tax and export revenues.

Put another way, cutting off your nose to spite your face seems a weird way to go about developing B.C.’s economy. Just sayin ...

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Stephen Hume: BC Ferries austerity program is based on false assumptions

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